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REGISTRATION FOR GST ON RENT ON IMMOVABLE PROPERTY

Question: I am a resident of Delhi having no business in Delhi or elsewhere but I have a commercial property in Noida(HARYANA) on which I receive a rent of Rs. 25 lakh. Where should I take registration and what tax should I pay ?

Answer: As you do not have a place of business or a fixed establishment in UP (State where the your commercial property is located) you have to take registration in Delhi (State of your usual place of residence) and pay IGST.

Question: I am a resident of Delhi having no business in Delhi or elsewhere but I have commercial property in NOIDA(HARYANA) GURUGRAM(UTTAR PARADESH) AND JAIPUR(RAJASTHAN) respectively. I am receiving rent of Rs. 10 lac from each of the property. Where should I take registration and what tax should I pay ?

Answer: As you do not have a place of business or a fixed establishment in IT, Haryana and Rajasthan (States where the your commercial property is located) you have to take registration in Delhi (State of your usual place of residence) and pay IGST

QUS Please tell if rental income up to 20 lacs attracts GST or
attracts any other charge?

GST is leviable only if aggregate
turnover is more than 20 lacs. (Rs. 10
lacs in 11 special category States). For
computing aggregate supplies turnover
of all supplies made by you would be
added.

#Case No.1: Single Property rental income less than 20 Lakh

A person residing in Delhi have a commercial property in Haryana and getting a rent of Rs.30,000/- per month or say Rs.3,60,000/- yearly.

Solution: As per GST rules, in case of immovable property, the place of supply shall be the address of the immovable property. Therefore, even though the person owning the property is located in Delhi, the place of supply shall always be the place where property is situated.

Further, the supply of services shall also take place where the immovable property is situated. Hence, the following transaction shall takes place:

Taxability: Taxable

Exemption: Yes, since total receipts are less than Rs.20 Lakh.

Place of Supply: Haryana

Registration: Not required

#Case No.2: Single Property rental income is more than 20 Lakh

A person residing in Delhi have a commercial property in Haryana and getting a rent of Rs.3,00,000/- per month/Rs.36,00,000/- yearly.

Solution: As explained above, since the supply is taking place from where the property is situated,location of the service receiver of the property is irrelevant.

Hence, the following transaction shall takes place:

Taxability: Taxable

Exemption: No, since total receipts are more than Rs.20 lakh

Place of Supply: Haryana

Registration: If you do not have a place of business or a fixed establishment in Haryana then registration is required to be taken from Delhi

Tax invoice: Yes, invoice needs to be raised each month.

What to charge: IGST if registration taken from DELHI

#Case No.3: Muliple Property having individual rental income less than 20 Lakh.

A person residing in Delhi have a commercial property in Haryana and getting a rent of Rs.125,000/- per month and a commercial property in Noida (UP) at monthly rent of Rs.100,000/-per month.

Solution: This is a special case, where the owner has two properties and individually their rental income is less than basic exemption limit but collectively, it is more than the basic limit.

As per GST law, we need to see the basic exemption limit on Pan India basis and not on individual basis. This is because though we have two properties but these are owned by a single person and exemption is checked on single PAN basis.

Hence, the following transaction shall takes place:

Taxability: Taxable

Exemption: No, since total receipts are more than Rs.20 lakh

Place of Supply: Haryana

Registration: If you do not have a place of business or a fixed establishment in Haryana and UP then registration can be taken from Delhi